Correlation Between Lassila Tikanoja and Olvi Oyj
Can any of the company-specific risk be diversified away by investing in both Lassila Tikanoja and Olvi Oyj at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lassila Tikanoja and Olvi Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lassila Tikanoja Oyj and Olvi Oyj A, you can compare the effects of market volatilities on Lassila Tikanoja and Olvi Oyj and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lassila Tikanoja with a short position of Olvi Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lassila Tikanoja and Olvi Oyj.
Diversification Opportunities for Lassila Tikanoja and Olvi Oyj
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lassila and Olvi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lassila Tikanoja Oyj and Olvi Oyj A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olvi Oyj A and Lassila Tikanoja is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lassila Tikanoja Oyj are associated (or correlated) with Olvi Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olvi Oyj A has no effect on the direction of Lassila Tikanoja i.e., Lassila Tikanoja and Olvi Oyj go up and down completely randomly.
Pair Corralation between Lassila Tikanoja and Olvi Oyj
Assuming the 90 days trading horizon Lassila Tikanoja Oyj is expected to under-perform the Olvi Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Lassila Tikanoja Oyj is 1.55 times less risky than Olvi Oyj. The stock trades about -0.4 of its potential returns per unit of risk. The Olvi Oyj A is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 2,960 in Olvi Oyj A on September 2, 2024 and sell it today you would lose (120.00) from holding Olvi Oyj A or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lassila Tikanoja Oyj vs. Olvi Oyj A
Performance |
| Timeline |
| Lassila Tikanoja Oyj |
| Olvi Oyj A |
Lassila Tikanoja and Olvi Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lassila Tikanoja and Olvi Oyj
The main advantage of trading using opposite Lassila Tikanoja and Olvi Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lassila Tikanoja position performs unexpectedly, Olvi Oyj can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Olvi Oyj will offset losses from the drop in Olvi Oyj's long position.| Lassila Tikanoja vs. Tokmanni Group Oyj | Lassila Tikanoja vs. TietoEVRY Corp | Lassila Tikanoja vs. Kemira Oyj | Lassila Tikanoja vs. Konecranes Plc |
| Olvi Oyj vs. Tokmanni Group Oyj | Olvi Oyj vs. Valmet Oyj | Olvi Oyj vs. Kesko Oyj | Olvi Oyj vs. Huhtamaki Oyj |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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